When will we learn why Bristol Energy failed?
Six years ago, Bristol city chiefs were pinning their hopes on a new council-owned energy firm to lift residents out of fuel poverty and, eventually, turn a profit for the local authority.
Fast forward to today, and Bristol Energy has accumulated debt of nearly £50 million and been broken up and sold.
Now taxpayers want to know exactly how much of their money was lost in the ill-fated venture and who is to blame.
Bristol Energy was set up in 2015 by the council’s previous cross-party cabinet under then mayor George Ferguson, and millions more has been poured in during the intervening five years by the Labour administration, headed by mayor Marvin Rees.
The original business plan committed the council to spend around £16 million, and the current administration raised the spending cap to £37.7 million, and set aside an extra £7.3 million in risk reserves, in April 2019.
The firm’s final annual report released on January 10 showed it lost £14.8 million in 2019/20.
That followed escalating losses each year since it was set up, of £2.9million in 2015/16, £8.4million in 2016/17, £11.2million in 2017/18 and £12.1million in 2018/19, records at Companies House show.
Last year, as the council announced it was selling Bristol Energy for £15.3million, deputy mayor Craig Cheney said the council had ploughed “£36.5million or so” into the company altogether.
But Lib Dem councillor Tim Kent, who has become enraged by the administration’s refusal to “come clean” on the exact amount spent, said he expects the final sum will be more like £50 million.
He and other councillors on the opposition benches, who have been warning about the company for years, are pinning their hopes on an independent report to reveal the extent of the financial losses and, crucially, why the council continued to invest in Bristol Energy when those losses were escalating.
Westbury-on-Trym and Henleaze Conservative councillor Geoff Gollop said: “I feel an enormous sense of frustration at Bristol Energy losing almost £50m of taxpayers’ money that could have been spent on public services here in Bristol.
“Over the last three years, I have repeatedly warned the Mayor of the risks of continuing to fund this failing company and I have been ignored on each occasion. The council’s auditors have now publicly criticised the way cabinet decisions were taken about the company. Sadly this is too late to stop this huge loss, but maybe it will stop such stupidity in the future.”
It’s not just opposition councillors who are hoping for answers.
Announcing last month that the council had asked its external auditor, Grant Thornton, to undertake a “public interest report” into the company, Bristol’s Labour mayor warned that such a report would investigate from the “very beginnings of this journey” and include “how did we end up inheriting the mess?”
Grant Thornton says it has not yet decided whether it will undertake a public interest report into Bristol Energy which would assess the council’s involvement in the company from inception to sale.
But in its value-for-money report on the financial year 2019-20, it criticises the governance arrangements for the failed energy company.
It concludes the cabinet was not properly informed before it invested extra money into Bristol Energy. Information the cabinet received from the shareholder group was “inadequate”, “did not clearly state the risks”, and was “out of date”.
The auditor made 12 recommendations relating to governance, openness and scrutiny in relation to the council’s companies.
Mr Rees said: “This report shows exactly why Bristol should never have been operating in the commercial energy market.”
Local Democracy Reporting Service